Journalism in the Public Interest

Walmart Accepted Clothing from Banned Bangladesh Factories

After the deadly building collapse in Bangladesh, Walmart released a list of factories it had banned. But it has continued receiving shipments from two of them.

Rescuers work after a building housing several garment factories collapsed in near Dhaka, Bangladesh, on April 24, 2013. After the deadly building collapse, Walmart released a list of factories it had banned. But it has continued receiving shipments from two of those factories. (A.M. Ahad/AP Photo)

Since the Rana Plaza building collapse killed more than 1,100 people in April, retailers have faced mounting pressure to improve safety at Bangladesh garment factories and to sever ties with manufacturers that don't measure up.

The world's largest retailer, Walmart, last month released a list of more than 200 factories it said it had barred from producing its merchandise because of serious or repeated safety problems, labor violations or unauthorized subcontracting.

But at least two of the factories on the list have continued to send massive shipments of sports bras and girls' dresses to Walmart stores in recent months, according to interviews and U.S. customs records.

In June 2011, Walmart said, it banned the Bangladeshi garment factory Mars Apparels from producing goods for the retail giant. But over the last year, Mars has repeatedly shipped tons of sports bras to Walmart, according to U.S. customs records and Mars owners. The most recent shipment was in late May, almost two years after Walmart claims it stopped doing business with the Bangladeshi firm.

A second Bangladeshi clothing maker, Simco Dresses, was blacklisted in January but continued shipping to Walmart Canada into March.

Walmart spokesman Kevin Gardner said the Mars shipments were allowed because of confusion over whether Walmart's standards applied. Mars didn't produce garments with a Walmart house brand but instead with a Fruit of the Loom label. So, Gardner said, it wasn't clear if Mars needed to meet Walmart's standards or Fruit of the Loom's.

Fruit of the Loom could not immediately be reached for comment.

As for Simco, orders that Walmart had already placed were accepted to lessen the impact on workers, Gardner said.

The shipments raise questions about Walmart's ability to monitor its supply chain as well as its efforts to ensure decent working conditions in factories located in low-wage countries.

Interviews with Bangladeshi factory owners spotlight another potential problem: Walmart's approach of publishing a blacklist with no further details might unfairly tar family businesses with minor violations.

International labor groups have been pressing retailers to sign an accord to pay for fire and building safety upgrades to Bangladesh factories. So far, several large retailers including H&M, Inditex and PVH Corp., which includes Tommy Hilfiger and Calvin Klein, have signed onto the agreement.

But many of the biggest retailers in the United States, including Walmart and Gap, have not. Instead, they are working on an alternative plan that they say will improve safety faster — but that is not legally binding.

"We think the safety plan that we've put in place already meets or exceeds the [other] proposal and is going to get results more quickly," Gardner said. "The point of the list is to get more accountability and transparency into our supply chain."

Soon, he said, Walmart would also publish safety audits of its current suppliers in Bangladesh.

Dan Schlademan, a United Food and Commercial Workers leader who directs the union's Making Change at Walmart campaign, said the shipments from barred factories show that Walmart's program is hollow.

"It's either a question of Walmart just telling people what they want to hear," he said, "or it's that Walmart has created a supply chain system that they have no control over."

Making Change at Walmart initially provided the customs data. ProPublica verified the information and found other shipments using public data compiled by research firms serving the import-export industry.

Mars Apparels is a manufacturer of lingerie and sportswear in the port city of Chittagong. In the last year, the garment maker sent at least 22 shipments, totaling 80 tons, of sports bras through the Port of Newark, according to customs records compiled by Import Genius, a data consultant for the import-export industry. In each case, the customer was listed as "Walmart Stores" and the product mark as "Ariela-Alpha International," whose brands include L.e.i. and Fruit of the Loom. (Ariela-Alpha did not return phone calls.)

Reached on a cell phone in Bangladesh, Shaker Ahmed, deputy managing director of Mars Apparels and the son of its founder, confirmed the customs data and said that the latest shipment went out last month. (Customs data show several May shipments in which the customer was listed as "WMR.")

But Ahmed said that until contacted by ProPublica, he had never had any problems with Walmart or heard about its list of banned factories. He described Mars as a medium-sized garment manufacturer with less than 1,000 workers.

Ahmed said Mars has supplied Walmart for more than a decade, though since 2008 it has been making clothes for private labels such as Fruit of the Loom that are owned or licensed by an importer, which then supplies the clothing to Walmart.

When Mars was manufacturing clothing for Walmart brands, its factory was regularly audited by the company, Ahmed said. Walmart rates its suppliers green, yellow, orange and red, with green being the best and red the worst, he said. "We never received a rating below yellow."

Since 2008, Ahmed said he has passed all audits by Fruit of the Loom, which uses the Worldwide Responsible Accredited Production program to inspect factories. Walmart said Mars didn't meet all of its criteria, which it said is more stringent than WRAP's. Ahmed said he welcomed Walmart to look at his factory and that the company is in the process of building a state-of-the-art facility.

Walmart accounts for a "very large" percentage of Mars' business, Ahmed said. "If Walmart were to tell us they're stopping production, if that were to happen, we would be destroyed. Our workers would be destroyed. We haven't had a single incident in 19 years. We never had a problem. So that would be catastrophe."

The other banned garment maker in the recent customs records, Simco Dresses, was blacklisted in January. The Import Genius records show three shipments of girls' dresses in February and March to the Isfel Co. destined for Walmart Canada. Isfel didn't return a call.

Customs records provided by another trade research firm PIERS show four more March shipments of knitted dresses and rompers, also destined for Walmart Canada.

The Bangladeshi pressreported in January that Walmart had refused a shipment of women's shorts from Simco after discovering unauthorized subcontracting to Tazreen Fashion, where a fire killed 117 people last year. Simco said at the time that Walmart's ban could drive it into bankruptcy.

Simco's managing director Muzaffar Siddique said his firm had subcontracted an order to an authorized Walmart supplier, which then sent the work to Tazreen without its knowledge.

Asked about the February and March shipments from Simco, Walmart spokesman Gardner said, "If it isn't an egregious matter, we will accept goods produced under existing orders as part of our efforts to mitigate impact on the workers."

Siddique contended that Walmart's listing of his company is unfair and is damaging his family's business. After the list was published, he said J.C. Penney canceled a $300,000 order for 500,000 pairs of pajamas.

"We are very upset about it," Siddique said. "When I do business with you, it is like a doctor-patient relationship; there should be confidentiality. Walmart has no business going about publishing people's names that it thinks are bad because that jeopardizes other business we are doing with our customers."

Walmart is the only U.S. retailer to release a list of barred factories in Bangladesh. Gap, which also has a large presence in Bangladesh, said in a May statement that it has committed up to $22 million for factory improvements and that its stepped-up inspections have already led to some vendors upgrading their plants. But the company has said it would not sign on to the accord because of a provision that could allow victims of future factory accidents to sue the companies in U.S. courts.

Walmart, Gap and other large retailers are moving forward with developing an alternative safety plan with the help of former U.S. Sens. George Mitchell, D-Maine, and Olympia Snowe, R-Maine.

"We are committed to Bangladesh," Gardner said. "We understand the role that we play in improving the livelihood of factory workers in that country. And improving the safety of those workers is very important to us."

But Walmart's approach of naming factories as "red-failed/unauthorized" has led to criticism in the Bangladeshi garment community that Walmart is trying to shift blame rather than serve as a partner.

"What Wal-Mart is doing at the moment is nothing but saving its own skin," Reaz Bin Mahmood of the Bangladesh Garment Manufacturers and Exporters Association told Reuters. "As a responsible business partner they should stay with us and help improve working conditions for the safety and security of workers."

32 comments

Re: Walmart’s comment of Fruit of the Loom products sold at Walmart. That is typical double speak. The real accomtability is not who’s standard the condemned plant has to meet but what is Walmart’s standard for products they sell.

Unfortunately poor labor conditions, child labor, safety conditions, etc. in the garment industry are often only (re-)recognized with catastrophes such as this. The debate for who should be responsible—the retailer, the manufacturer, or the sewing factory has gone round and round for ages with no one accepting the blame. I used to work for a budget manufacturer in the late 80s whose biggest customer was…wait for it…Walmart (at the time I naively wondered what Walmart was). Everything was produced in the US and locally (SF Bay Area). The retailer pressured the manufacturer to produce things cheaper with the promise of huge orders, and the manufacturer would pressure the sewing shops to produce goods for less with the promise of a lot of work all the while everyone putting a blind eye to any labor and safety issues. With overseas production it’s much easier to ignore.

And, it’s often only these catastrophes where the opacity of economic relations is briefly diminished.

Seems to me you both have identified the problems. Walmart destroyed the manufacturing industry in the USA and has now spread it’s practice of lowest price to the “global economy”. They know what they are doing and the lines of responsiblity, or ability ot duck responsibility, are clear. We need to hold Walmart, and the other global retailers, responsible for their actions. We can do that by not buying these cheap products.
The workers in American manufacturing used to be able to afford to shop at Walmarts as well as other retailers. Now that those jobs are gone and our workers make less money than ever, these workers have no choice but to shop at Walmarts.
A great game this is until it all crashes down.

Walmart did not become the largest retailer in the world by focusing only on profit.
When doing the blame game, you have to also consider overseas connivance where Walmart contracts with company A but A cannot deliver so it subcontracts with company B and C and D.
There is also a customer responsibility to not buy anything from Bangladesh or to personally
investigate exactly where the article was manufactured in Bangladesh and that the factory there
is safe and up to US standards. You can’t just blame someone else when you own stuff
manufactured under such conditions.

Granted Walmart and other retailers could and should demand more. The poor working conditions I believe are the responsibility of the countries where they are located. While Walmart makes for a good whipping boy I personally would start at the federal level and expand to the WTO.

Walmart does what Walmart wants to do. Go in there sometime and pick up any or their “Great Value” products. See if you can find the country of origin on the container. Try tuna fish for example. All other brands tell you where the product comes from even in Walmart. I was under the impression the country of origin has to be on the container, by law.

Walmart’s falling prices that were featured on the company’s TV ads (maybe they still are) illustrate the crux of the model. The thirst of Americans for the cheapest damn price has become a form of imperialism and a reason for those who are it’s victims to hate us more. I would gladly pay a little more for anything and everything if every hand along the way benefited. For every hand to benefit would have to be the responsibility of the retailers, not the factory owners or the home governments, or, as some have suggested, the WTO. The responsibility must be implicit to the contracts - you comply or we bail, period.

Fairleigh Brooks, Your argument is one that progressives embrace “collectivism”. I for one take no responsibility for purchasing a product at Walmart or any other retailer cheap or not. The crux of the problem lies in the nation country where these tragedies have occurred.

Fairleigh Brooks:
“I would gladly pay a little more for anything and everything if every
hand along the way benefited.”
I wouldn’t. You must be very much richer than I.

“you comply or we bail, period”
So do your own research. Fruit of the Loom? Walmart and every
single item they sell? Target? Costco? (and all the items they sell)
Your responsibility is overwhelming.

What do you buy? What brands and what stuff do you buy?

ME? I buy most of my stuff second hand, so I wouldn’t know.
However, I have pocket tee shirts from Costco and have not checked
them for country of origin. Should I throw them away?
What are you wearing?

Being born and raised up @ my teenage in Bangladesh I know:
Punishing factory owners and not the hopelessly dumb and recklessly greedy (Hereditary old style continuation of kingless prime-ministerial system of power abusing / social disorder causing senseless politics of secret manipulation or brutality) political leaders of Bangladesh; shall mean further financial hardship for helplessly needy Bangladeshi laborers who still not very unhappy to defray their every-day’s living costs of their family from an approximate earning of USD$ 2 /a Day per person (12 hours labor).
Healthy democracy can exist even when run by temporarily publicly elected dictators but never in this digital age by permanent, old-fashioned leadership of heredity or ruler-ship of king-royal type unwanted bullying folks that used to be self-declared lords of heaven on earth to rule over ordinary /average folks by using force of cruelty or abusing power of guns, laws etc..

Fairleigh, I both agree and disagree. Price is important for just about everybody on the planet (when you’re living on your own income, and maybe have people to support, there’s an obvious incentive to pay less), but the story doesn’t end there.

Walmart and other retailers work hard to hide the “real price” from consumers, so that the MSRP is the only representation we have. If it was more readily apparent where things we buy came from and what corners were cut, I think you’d see a change. Fair trade products sell better than I would have thought, for example, and I see people regularly at the supermarket checking the produce tags to eliminate the genetically-modified products.

Most people, though, give up because discovery is so complicated. You can’t go by price, because as a few people have pointed out, the pajamas manufactured for less than a dollar apiece are sold at a variety of price points, not always the cheapest. You also can’t boycott a store for merely carrying some products of dubious origin, because then you’d never buy anything ever again. And it’d be a full-time job to research the supply chain for every purchase.

So whereas I blame the consumer to a certain extent, they’re not the limit of the blame, or even the majority.

A few months ago in Bangladesh, how many people died and a fire at a garmet factory? 115 was it, or more? Supervisors locked the escape doors and told the employees to go back to work, it was a small fire after the fire alarm sounded! In the name of profit for Walmart! Those that are in admistration positions at Walmart are not dummies. They full well know what is going on. They refuse to accept ANY responsibilty.

Damn the dollars, these are human beings just trying to earn a living!

John Henry Bicycle Lucas
If you don’t listen to someone who grew up in Bangladesh, you are speaking about that which you know nothing. Read above, please. Especially read the originating post where you can see that 1,100 people died, not 115.

The Bangladeshi press [9] reported [10] in January that Walmart had refused a shipment of women’s shorts from Simco after discovering unauthorized subcontracting to Tazreen Fashion, where a fire killed 117 people [11] last year. Simco said at the time [12] that Walmart’s ban could drive it into bankruptcy.

Ed, this is the fire I was asking about. I did not remember the exact number.Most of what I have posted is pure opinion, and I do think I know what my opinion is :)

Ed, I think John was talking about (or at least confusing with) the fire last winter, which was almost identical to the Triangle Shirtwaist Factory in New York a hundred years ago. When I heard about this fire, I actually ignored it for a few days, figuring it was the old story suddenly discovered by reporters, too.

I am not an expert of our garments sector. i want to say few words; Accident happens. Nobody knows when and where. I could die right now. The reason Rana Plaza (the building name) destroyed has some consequences,
(1) The building was poorly constructed, It was not designed to take this heavy load [three factories, heavy machinery, generator, tremendous people load etc.]
(2) two days ago [before the collapse] there was a sign of destruction in the building main column found.
(3) Engineer advice to the building authority to stop all sort of work in the building until the problem resolved.
(4) Building owner and factory owner don’t listen to the engineer and continue their work.[ only a bank named BRAC BANK stop their work immediately and close the bank ]
.......tomorrow morning it happened ;(
I don’t believe this is the only reason for this accident, what i do believe these are some of the main reasons.
Yes its true our garments workers are paid poorly, but still they wants to work. Hoping that salary will be increased one day. Infrastructure and administration in a garments is one the main issue here. I hope people will talk about how to improve that, rather than blaming government, owner,Walmart etc. etc, I think this more important for our country now a days. Thanks.

Thank you, Hasan for your comments. Are you a Bangladesh national?
Also, Shahislam has spoken and was hoping to hear from that person?

America, during it’s climb up the economic chain, had the same issues. Publicity and public opinion helped accelerate improvements in safety. Wages and salaries rose over time because America was cheaper and just as efficient as world competitors. China started out about 20 or so years ago being the lowest cost producer. Now their factories are much safer and their wages are higher. That will happen in Bangladesh also if the world doesn’t punish the Bangladesh citizens for individuals’ failures.

Keep the public informed of all safety issues and be active trying to improve safety and Bangladesh will grow. Of that I am certain.

Labor unions changed America for the better—- WITHOUT QUALIFICATION.
Once they solved their problems they found other problems to address and Labor Bosses (even in the era where they were needed) sought power. “On The Waterfront” is NOT inaccurate. Been there, done that!

Good for Walmart! They made a cost conscious decision so they could offer reasonably good clothes to poor consumers at prices they could afford. It’s all well and good for tony middle class folk and the perpetual whiners on the Left and in the Unions to wave the bloody shirt about buying goods from sweat shops. Walmart markets to the down-scale who can’t afford the scruples of the Left and the Unions aren’t kidding anybody about their interest.

tim tim: Wal-mart applied Goebbels maxim: “Tell a lie often enough and it becomes the truth.” Most of Wal-Mart’s prices are no lower than anyone else’s and most of Wal-marts goods are inferior to anyone else’s.

Ed Bradford
American’s standard of living is decreasing. Part of the reason is the exporting of jobs to other nations. Part of the reason is that big box stores have put local businessmen (and women) out of business. Low prices are not bargains when all those prices buy are junk.

No I don’t study Goebbels and I didn’t mention Mengele—-you did. Regardless, Goebbels was right. Call it brain-washing if you prefer. Referring to something you know little or nothing about as ignorant is in itself ignorant.

Corlyss, who has prices good enough to sell to the thousands of people who die bringing you your cheap t-shirt that’ll wear out in a week, I wonder?

I mean, it’s not just “cheap” as in “low price,” but also as in “low quality.” You’ll spend at least twice the amount at the lower end, making it easy to understand how poor people stay poor. (See also cheap junk food and expensive vegetables, and wondering why poor people aren’t healthy.)

If they truly wanted to factor labor costs out, they’d automate, but you don’t see them doing it, because it’s not relevant, even with unions. If you actually do the research (I know, bad consumer), you’ll see that labor accounts for almost nothing in any product’s manufacture. Keeping up with fire inspections is an even lesser percentage.

The iPhone, which has far better-paid labor than clothing, has a labor cost of something like six bucks per unit. Does anybody think Apple’s marketshare (which includes substantial numbers of poorer people) would plummet if they paid their factory workers double?

William Wilgus
Why do you say the US standard of living is declining? Since when? Where do you get your information? Using a Nazi as an source of facts or truth has always been and always will be profocative and quite open to doubt. I suggest you find a better example than Goebbels.

Ed Bradford:
I did not use a Nazi as a source of facts or truth. I quoted him. Please learn to read and comprehend.

I got my information from personal experience and that of friends and neighbors. The following is from Wikipedia and supports my claim.

The median income is $43,318 per household ($26,000 per household member)[1] with 42% of households having two income earners.[38] Meanwhile, the median income of the average American age 25+ was roughly $32,000[2] ($39,000 if only counting those employed full-time between the ages of 25 to 64) in 2005.[3] According to the CIA the gini index which measures income inequality (the higher the less equal the income distribution) was clocked at 45.0 in 2005,[39] compared to 32.0 in the European Union[40] and 28.3 in Germany.[41]

|The US has… a per capita GDP [PPP] of $42,000… The [recent] onrush of technology largely explains the gradual development of a “two-tier labor market”... Since 1975, practically all the gains in household income have gone to the top 20% of households… The rise in GDP in 2004 and 2005 was undergirded by substantial gains in labor productivity… Long-term problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups. -CIA factbook on the US economy, 2005.[39]

The United States has one of the widest rich-poor gaps of any high-income nation today, and that gap continues to grow.[42] In recent times, some prominent economists including Alan Greenspan have warned that the widening rich-poor gap in the U.S. population is a problem that could undermine and destabilize the country’s economy and standard of living stating that “The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself”.[43]

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